Abstract The overall objective of this proposal is to define the molecular mechanisms contributing to liver carcinogenesis. The development of hepatocellular carcinoma is mediated by multiple growth signaling pathways that regulate cellular proliferation. We have shown that liver cell growth is regulated by two recently- discovered heparin-degrading endosulfatases, sulfatase 1 (SULF1) and sulfatase 2 (SULF2). These sulfatases modify the binding of heparin-binding growth factors to their receptors on the cell surface or in the extracellular matrix. We have generated striking preliminary data that show that SULF1 and SULF2 have opposing effects on proliferation and tumorigenesis of hepatocellular carcinoma cell lines. These results are particularly intriguing because SULF1 and SULF2 have both been shown to have a similar 6-O-endosulfatase action on heparan sulfate proteoglycan substrates. Our further experiments suggest that SULF1 and SULF2 exert their effects on hepatocellular carcinoma cells in part through modulation of the Wnt/[unreadable]-catenin signaling pathway. Based on these extensive preliminary data, we propose the CENTRAL HYPOTHESIS that SULF1 and SULF2 differentially regulate Wnt/[unreadable]-catenin signaling, leading to consequent opposing effects on cancer cell proliferation and sensitivity to apoptosis. Our proposal has three SPECIFIC AIMS. FIRST, we will test the hypothesis that SULF1 and SULF2 have opposing functional effects on Wnt/[unreadable]-catenin signaling in hepatocellular carcinoma by demonstrating that i) SULF1 downregulates and ii) SULF2 upregulates Wnt/[unreadable]- catenin signaling that mediates downstream effects on Wnt pathway constituents, cell growth and sensitivity to apoptosis. SECOND, we will test the hypothesis that SULF1 and SULF2 have opposing functional effects because they bind to and desulfate different subdomains of the heparan sulfate proteoglycans at the cell. In this Specific Aim we will i) examine the differences in action of SULF1 and SULF2 on subdomains of heparan sulfate on the cell surface, and ii) determine the specific protein domains on SULF1 and SULF2 responsible for the differences in functional effects of the two sulfatases. FINALLY, in the THIRD aim, we will test the hypothesis that SULF1 and SULF2 have opposing mechanistic and functional effects on liver carcinogenesis in vivo. In this aim, we will examine i) differential effects of modulation of SULF1 and SULF2 expression on Wnt signaling pathways in SULF1 and SULF2 knockout and transgenic mice, and ii) the association between SULF1 and SULF2 expression and Wnt target gene expression in human hepatocellular carcinomas. To address these questions, we have established hepatocellular carcinoma cell lines that differentially express SULF1 and SULF2 and have become adept at dissecting heparin-binding growth factor and Wnt/[unreadable]-catenin signaling pathways. We are also collaborating with a structural biologist to explore SULF1 and SULF2 structure-function relationships. Finally, we have obtained SULF1 and SULF2 knockout mice and are developing SULF1 and SULF2 transgenic mouse models for the in vivo studies. The proposal is conceptually and technically innovative as it tests new concepts as to how heparin-degrading endosulfatases regulate the major cancer phenotypes of dysregulated proliferation and evasion of apoptosis. The information emanating from these studies may lead to the development of therapeutic strategies for chemoprevention and treatment of hepatocellular carcinoma.